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Comment by FabioFleitas | Hacker News Reader

If Elon is guaranteeing a $420/share buyout - are there any downsides to buying as much stock as possible right now? Would the only risk be that this whole plan falls through or that Elon ultimately decides against that price?

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As shares are not close to $420 right now, that indicates healthy skepticism that Elon is capable of getting this done. Do you have reason to believe that he is capable of raising $50-80 billion to complete the transaction? If yes, then you have a great arbitrage opportunity.

> Would the only risk be that this whole plan falls through or that Elon ultimately decides against that price?

That is pretty big risk; if this plan isn't real or falls through, the stock is going down hard.

That's not a negligible risk. It's analogous to thinking bonds have no risk because the issuing company guarantees it (forgetting it might well go bankrupt).

Yeah, I think the price now will end up reflecting what people think is the odds of this happening. If you are 100% sure this will happen, you would be willing to buy shares for $419. If you are 90% sure you may stop at $400 etc.

Thats correct. Which is why you see that the current stock price is currently spiking, as people rush to get the "good" deal for free money.... Which means that as the stock gets closer to 420$, the amount of "free" money quickly goes away.

There are many factors that could affect this. There is no words of the source of the fund, although people believe he already has that secured. And all shareholders have to vote. The last and most important is when this would actually happen.

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